diff --git a/config.yml b/config.yml
index 748729ec6b..248dd5a5ca 100644
--- a/config.yml
+++ b/config.yml
@@ -2032,7 +2032,8 @@ nodes:
     comment: |
       Represents reading a local variable. Note that this requires that a local
       variable of the same name has already been written to in the same scope,
-      otherwise it is parsed as a method call.
+      otherwise it is parsed as a method call. Note that `it` default parameter
+      has `0it` as the name of this node.
 
           foo
           ^^^
diff --git a/include/prism/diagnostic.h b/include/prism/diagnostic.h
index da430b5438..fb41102361 100644
--- a/include/prism/diagnostic.h
+++ b/include/prism/diagnostic.h
@@ -167,6 +167,7 @@ typedef enum {
     PM_ERR_INVALID_PERCENT,
     PM_ERR_INVALID_TOKEN,
     PM_ERR_INVALID_VARIABLE_GLOBAL,
+    PM_ERR_IT_NOT_ALLOWED,
     PM_ERR_LAMBDA_OPEN,
     PM_ERR_LAMBDA_TERM_BRACE,
     PM_ERR_LAMBDA_TERM_END,
diff --git a/src/diagnostic.c b/src/diagnostic.c
index c779955eb3..ed47a1cdad 100644
--- a/src/diagnostic.c
+++ b/src/diagnostic.c
@@ -175,6 +175,7 @@ static const char* const diagnostic_messages[PM_DIAGNOSTIC_ID_LEN] = {
     [PM_ERR_INVALID_PERCENT]                    = "invalid `%` token", // TODO WHAT?
     [PM_ERR_INVALID_TOKEN]                      = "invalid token", // TODO WHAT?
     [PM_ERR_INVALID_VARIABLE_GLOBAL]            = "invalid global variable",
+    [PM_ERR_IT_NOT_ALLOWED]                     = "`it` is not allowed when an ordinary parameter is defined",
     [PM_ERR_LAMBDA_OPEN]                        = "expected a `do` keyword or a `{` to open the lambda block",
     [PM_ERR_LAMBDA_TERM_BRACE]                  = "expected a lambda block beginning with `{` to end with `}`",
     [PM_ERR_LAMBDA_TERM_END]                    = "expected a lambda block beginning with `do` to end with `end`",
diff --git a/src/prism.c b/src/prism.c
index 570b86ab1d..67dcfcf451 100644
--- a/src/prism.c
+++ b/src/prism.c
@@ -4200,12 +4200,10 @@ pm_local_variable_or_write_node_create(pm_parser_t *parser, pm_node_t *target, c
 }
 
 /**
- * Allocate a new LocalVariableReadNode node.
+ * Allocate a new LocalVariableReadNode node with constant_id.
  */
 static pm_local_variable_read_node_t *
-pm_local_variable_read_node_create(pm_parser_t *parser, const pm_token_t *name, uint32_t depth) {
-    pm_constant_id_t name_id = pm_parser_constant_id_token(parser, name);
-
+pm_local_variable_read_node_create_constant_id(pm_parser_t *parser, const pm_token_t *name, pm_constant_id_t name_id, uint32_t depth) {
     if (parser->current_param_name == name_id) {
         pm_parser_err_token(parser, name, PM_ERR_PARAMETER_CIRCULAR);
     }
@@ -4224,6 +4222,15 @@ pm_local_variable_read_node_create(pm_parser_t *parser, const pm_token_t *name,
     return node;
 }
 
+/**
+ * Allocate a new LocalVariableReadNode node.
+ */
+static pm_local_variable_read_node_t *
+pm_local_variable_read_node_create(pm_parser_t *parser, const pm_token_t *name, uint32_t depth) {
+    pm_constant_id_t name_id = pm_parser_constant_id_token(parser, name);
+    return pm_local_variable_read_node_create_constant_id(parser, name, name_id, depth);
+}
+
 /**
  * Allocate and initialize a new LocalVariableWriteNode node.
  */
@@ -4249,6 +4256,57 @@ pm_local_variable_write_node_create(pm_parser_t *parser, pm_constant_id_t name,
     return node;
 }
 
+/**
+ * Returns true if the given bounds comprise `it`.
+ */
+static inline bool
+pm_token_is_it(const uint8_t *start, const uint8_t *end) {
+    return (end - start == 2) && (start[0] == 'i') && (start[1] == 't');
+}
+
+/**
+ * Returns true if the given node is `it` default parameter.
+ */
+static inline bool
+pm_node_is_it(pm_parser_t *parser, pm_node_t *node) {
+    // Check if it's a local variable reference
+    if (node->type != PM_CALL_NODE) {
+        return false;
+    }
+
+    // Check if it's a variable call
+    pm_call_node_t *call_node = (pm_call_node_t *) node;
+    if (!pm_call_node_variable_call_p(call_node)) {
+        return false;
+    }
+
+    // Check if it's called `it`
+    pm_constant_id_t id = ((pm_call_node_t *)node)->name;
+    pm_constant_t *constant = pm_constant_pool_id_to_constant(&parser->constant_pool, id);
+    return pm_token_is_it(constant->start, constant->start + constant->length);
+}
+
+/**
+ * Convert a `it` variable call node to a node for `it` default parameter.
+ */
+static pm_node_t *
+pm_node_check_it(pm_parser_t *parser, pm_node_t *node) {
+    if (
+        (parser->version != PM_OPTIONS_VERSION_CRUBY_3_3_0) &&
+        !parser->current_scope->closed &&
+        pm_node_is_it(parser, node)
+    ) {
+        if (parser->current_scope->explicit_params) {
+            pm_parser_err_previous(parser, PM_ERR_IT_NOT_ALLOWED);
+        } else {
+            pm_node_destroy(parser, node);
+            pm_constant_id_t name_id = pm_parser_constant_id_constant(parser, "0it", 3);
+            node = (pm_node_t *) pm_local_variable_read_node_create_constant_id(parser, &parser->previous, name_id, 0);
+        }
+    }
+    return node;
+}
+
 /**
  * Returns true if the given bounds comprise a numbered parameter (i.e., they
  * are of the form /^_\d$/).
@@ -13549,8 +13607,13 @@ parse_pattern_primitive(pm_parser_t *parser, pm_diagnostic_id_t diag_id) {
                     parser_lex(parser);
                     pm_node_t *variable = (pm_node_t *) parse_variable(parser);
                     if (variable == NULL) {
-                        PM_PARSER_ERR_TOKEN_FORMAT(parser, parser->previous, PM_ERR_NO_LOCAL_VARIABLE, (int) (parser->previous.end - parser->previous.start), parser->previous.start);
-                        variable = (pm_node_t *) pm_local_variable_read_node_create(parser, &parser->previous, 0);
+                        if (parser->version != PM_OPTIONS_VERSION_CRUBY_3_3_0 && pm_token_is_it(parser->previous.start, parser->previous.end)) {
+                            pm_constant_id_t name_id = pm_parser_constant_id_constant(parser, "0it", 3);
+                            variable = (pm_node_t *) pm_local_variable_read_node_create_constant_id(parser, &parser->previous, name_id, 0);
+                        } else {
+                            PM_PARSER_ERR_TOKEN_FORMAT(parser, parser->previous, PM_ERR_NO_LOCAL_VARIABLE, (int) (parser->previous.end - parser->previous.start), parser->previous.start);
+                            variable = (pm_node_t *) pm_local_variable_read_node_create(parser, &parser->previous, 0);
+                        }
                     }
 
                     return (pm_node_t *) pm_pinned_variable_node_create(parser, &operator, variable);
@@ -14452,6 +14515,31 @@ parse_expression_prefix(pm_parser_t *parser, pm_binding_power_t binding_power, b
             if ((binding_power == PM_BINDING_POWER_STATEMENT) && match1(parser, PM_TOKEN_COMMA)) {
                 node = parse_targets_validate(parser, node, PM_BINDING_POWER_INDEX);
             }
+            else {
+                // Check if `it` is not going to be assigned.
+                switch (parser->current.type) {
+                  case PM_TOKEN_AMPERSAND_AMPERSAND_EQUAL:
+                  case PM_TOKEN_AMPERSAND_EQUAL:
+                  case PM_TOKEN_CARET_EQUAL:
+                  case PM_TOKEN_EQUAL:
+                  case PM_TOKEN_GREATER_GREATER_EQUAL:
+                  case PM_TOKEN_LESS_LESS_EQUAL:
+                  case PM_TOKEN_MINUS_EQUAL:
+                  case PM_TOKEN_PARENTHESIS_RIGHT:
+                  case PM_TOKEN_PERCENT_EQUAL:
+                  case PM_TOKEN_PIPE_EQUAL:
+                  case PM_TOKEN_PIPE_PIPE_EQUAL:
+                  case PM_TOKEN_PLUS_EQUAL:
+                  case PM_TOKEN_SLASH_EQUAL:
+                  case PM_TOKEN_STAR_EQUAL:
+                  case PM_TOKEN_STAR_STAR_EQUAL:
+                    break;
+                  default:
+                    // Once we know it's neither a method call nor an assignment,
+                    // we can finally create `it` default parameter.
+                    node = pm_node_check_it(parser, node);
+                }
+            }
 
             return node;
         }
@@ -15059,6 +15147,7 @@ parse_expression_prefix(pm_parser_t *parser, pm_binding_power_t binding_power, b
 
                     if (match2(parser, PM_TOKEN_DOT, PM_TOKEN_COLON_COLON)) {
                         receiver = parse_variable_call(parser);
+                        receiver = pm_node_check_it(parser, receiver);
 
                         saved_param_name = pm_parser_current_param_name_unset(parser);
                         pm_parser_scope_push(parser, true);
diff --git a/test/prism/errors_test.rb b/test/prism/errors_test.rb
index d1af9a5dae..60322585f0 100644
--- a/test/prism/errors_test.rb
+++ b/test/prism/errors_test.rb
@@ -2069,6 +2069,13 @@ def test_forwarding_arg_and_block
       ], compare_ripper: false # Ripper does not check 'both block arg and actual block given'.
     end
 
+    def test_it_with_ordinary_parameter
+      source = "proc { || it }"
+      errors = [["`it` is not allowed when an ordinary parameter is defined", 10..12]]
+
+      assert_errors expression(source), source, errors, compare_ripper: false
+    end
+
     private
 
     def assert_errors(expected, source, errors, compare_ripper: RUBY_ENGINE == "ruby")
diff --git a/test/prism/location_test.rb b/test/prism/location_test.rb
index e5b7546925..9d583635e0 100644
--- a/test/prism/location_test.rb
+++ b/test/prism/location_test.rb
@@ -174,6 +174,10 @@ def test_CallNode
 
       assert_location(CallNode, "foo bar baz")
       assert_location(CallNode, "foo bar('baz')")
+
+      assert_location(CallNode, "-> { it }", 5...7, version: "3.3.0") do |node|
+        node.body.body.first
+      end
     end
 
     def test_CallAndWriteNode
@@ -570,6 +574,12 @@ def test_LocalVariableOrWriteNode
 
     def test_LocalVariableReadNode
       assert_location(LocalVariableReadNode, "foo = 1; foo", 9...12)
+      assert_location(LocalVariableReadNode, "-> { it }", 5...7) do |node|
+        node.body.body.first
+      end
+      assert_location(LocalVariableReadNode, "foo { it }", 6...8) do |node|
+        node.block.body.body.first
+      end
     end
 
     def test_LocalVariableTargetNode
@@ -674,6 +684,9 @@ def test_PinnedExpressionNode
 
     def test_PinnedVariableNode
       assert_location(PinnedVariableNode, "bar = 1; foo in ^bar", 16...20, &:pattern)
+      assert_location(PinnedVariableNode, "proc { 1 in ^it }.call(1)", 12...15) do |node|
+        node.receiver.block.body.body.first.pattern
+      end
     end
 
     def test_PostExecutionNode
@@ -891,8 +904,8 @@ def test_all_tested
 
     private
 
-    def assert_location(kind, source, expected = 0...source.length)
-      result = Prism.parse(source)
+    def assert_location(kind, source, expected = 0...source.length, **options)
+      result = Prism.parse(source, **options)
       assert_equal [], result.comments
       assert_equal [], result.errors